September 24, 2021

Biz Journal

Business perfection

Almonds Swept California Farms. Then the Water Ran Out.

For years the nuts have been considered one of California’s star crops, exported in bulk and utilized in meals merchandise all through the grocery store. Now, farmers in parched elements of the state are bulldozing 1000’s of acres’ value of almond orchards that can not be irrigated, and dropping plans to plant extra as they confront what farmers say could possibly be a warmer, drier future.

The drought, which started final 12 months, has unfold throughout practically the entire western U.S. Mixed with looming restrictions on groundwater utilization, it’s prompting a reckoning in California’s $6 billion almond business, which grows about 80% of the world’s provide. The state of affairs is reshaping the state’s meals sector, forcing farmers to reassess which crops they are going to have the water to provide, and the place. It is usually difficult food-company executives tasked with conserving grocery retailer cabinets stuffed when reservoirs or wells run dry.

Mark Jansen,

chief govt of Blue Diamond Growers, mentioned: “We foresee an finish of the unconstrained progress in almond provide.”

California grows about 80% of the world’s provide of almonds, a high-value crop with a mechanized harvest.

Almond timber require numerous water, and the drought is main some farmers to cull their orchards and reassess which crops they are going to have the water to provide.

The Sacramento-based almond large has helped propel California’s almonds into pantries nationwide by way of snack bars, flour and its Almond Breeze milk various. However conserving Blue Diamond and different almond processors provided with nuts means tough selections for farmers working quick on water this 12 months.

With no water flowing from canals to his Huron, Calif., farm,

Jim Anderson

in February opted to not plant 6,000 acres he sometimes devotes to crops like garlic and carrots. As a substitute, he despatched groundwater from his wells to his almonds, which characterize many years of funding. Nonetheless in need of water, Mr. Anderson pulled out 400 acres of almonds in April.

“We’re grinding up timber as we converse.” Mr. Anderson mentioned. “Lovely orchards that would’ve lasted one other 5 or 6 years.”

Drought has lengthy been a reality of life for California farmers. However the present one got here on quick, and never lengthy after the earlier one ended. Meteorologists’ predictions of extra frequent and deeper dry intervals are rattling growers who already are going through cutbacks of their water allotments and limits on groundwater pumping.

These pressures might pressure crop producers to fallow between half one million and a million acres of farmland in California’s San Joaquin Valley within the subsequent two to a few many years, based on estimates from teachers and assume tanks within the state. Crops like rice and cotton have already got seen steep declines in plantings this 12 months.

Richard Waycott,

chief govt of the Almond Board of California, mentioned almonds probably will stay a most popular crop for a lot of farmers. Acreage already has begun migrating north to extra water-secure elements of the state. Almonds might substitute different crops in a position to thrive in locations past California, he mentioned, as demand for the nuts and their earnings for farmers preserve the business rising even when fewer acres are planted there.

“World-wide demand actually isn’t satiated,” Mr. Waycott mentioned, including that advances in irrigation know-how and orchard administration are serving to farmers stretch their water additional. Almonds are a thirsty crop. One acre of mature timber requires roughly 1.3 million gallons of water a 12 months. That’s lower than rice or alfalfa, much like different nut timber, and twice the quantity of greens like lettuce and broccoli.

U.S. almond manufacturing has boomed as farmers flocked to the high-value crop with a mechanized harvest, thought-about completely suited to California’s local weather. Final 12 months farmers produced a document 3.1 billion kilos of almonds utilizing essentially the most acres ever, based on U.S. Division of Agriculture information.

Stuart Woolf pulled up 400 acres of almond timber at his residence ranch this 12 months, turning the timber into an enormous pile of wooden chips.

Blue Diamond, a century-old grower-owned cooperative, has reaped the advantages of the almond bonanza. The coop has grown into the world’s largest almond processing and advertising firm with gross sales final 12 months totaling $1.6 billion, greater than double the earlier decade. Grocery gross sales of Almond Breeze, the corporate’s most worthwhile product, topped $800 million final 12 months.

If historical past is any information, Blue Diamond’s Mr. Jansen mentioned, California’s present drought will curb almond yields, cut back provides and drive costs greater in years to come back. Costs growers acquired for his or her nuts hit a document $4 per pound throughout the earlier drought, earlier than falling to the bottom in additional than a decade final 12 months.

SHARE YOUR THOUGHTS

What long-term influence will the drought have on the almond business and different crops? Be part of the dialog beneath.

Dino Giacomazzi

is attempting to make the mathematics work. In a 12 months when the U.S. Bureau of Reclamation has reduce water allocations for a lot of California farmers to zero, he’s nonetheless receiving 1 / 4 of his regular quantity, and may pump sufficient groundwater to maintain his almond orchards intact. However the drought, mixed with expectations that he’ll have the ability to draw much less from his wells sooner or later, has prompted him to cut back plans to plant extra almonds by 30%.

“I believe the almond market in California has peaked,” mentioned Mr. Giacomazzi, who guess large on the nuts when he started shifting his household’s 120-year-old dairy farm into almonds in 2013. He mentioned he’ll depart a few of his acres in wheat and alfalfa, land he can fallow in dry years with a view to shift water towards his almond orchards.

Throughout California’s earlier drought, which ran from 2012 to 2016, tighter almond provides prompted Blue Diamond to close its almond butter enterprise to divert its nuts to extra worthwhile merchandise like milk. This time, Mr. Jansen mentioned he anticipates the corporate will cut back the quantity of nuts it exports in bulk to nations like India and China to make sure enough provides for its personal merchandise and packaged meals clients.

The corporate final 12 months invested in a digital platform to measure its members’ water assets and assist plan for future dry spells.

Stuart Woolf’s

household has grown almonds in California for 50 years and runs a serious almond processor within the state. He has been slowly shifting his almond acreage north, this 12 months pulling out 400 acres of timber at his residence ranch additional south and fallowing 40% of his row crop acreage to maintain his remaining orchards there.

Mr. Woolf mentioned he’s now new traces of enterprise, together with launching an orchard removing enterprise to assist farmers searching for to dig up timber in favor of utilizing their land for conservation applications. He’s additionally contemplating investing in orchards in Portugal, the place he says water availability is a surer guess.

Mr. Woolf mentioned, “We all know going ahead our water state of affairs will change into extra dire.”

Write to Jesse Newman at [email protected]

Corrections & Amplifications
One acre of mature almond timber requires roughly 1.3 million gallons of water a 12 months. An earlier model of this text incorrectly mentioned one mature tree requires roughly 1.3 million gallons of water a 12 months. (Corrected on July 5)

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